To Control Costs, Look at the Big Picture

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To Control Costs, Look at the Big Picture

February 19, 2025

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With a cautious mood expected for the coming year, cost control is a key focus for many companies. However, some mines may adopt a short-term view of costs, potentially leading to actions that could increase expenses in the long run. In this article, we share five tips from our experts on practicing cost control while considering the long-term perspective.

Tip #1: Cost avoidance is where the big numbers are.

Every mine has to be cost-conscious these days, and that can lead decision-makers to scrutinize every purchase. While responsible practices around spending are critical, the biggest savings opportunities come from cost prevention as opposed to cost-cutting.

Your equipment is the machinery that powers your mining output and revenue flow. How it performs over time, therefore, is critical – any lost production time will have an immediate impact on the bottom line that can far exceed any short-term savings on parts, maintenance, or disposable items.

Tip #2: Think of a mine as you would a factory.

Making a process as efficient as possible is the key to cost control in manufacturing, and the same principle applies in mining. Like a factory production line, a mine executes a chain of events where the ore moves from being drilled or blasted out, loaded onto trucks, and then transported to a processing plant.

The key to efficient operation is ensuring that the capacities of the equipment at each stage are matched as closely as possible. The size and design of buckets and truck boxes should, therefore, be sized as the production targets dictate. Trucks, excavators, and loaders should also be sized to match their capacities. The key is to avoid, as much as possible, costly bottlenecks where equipment has to stand idle waiting for other equipment.

An operation can be either loader-dependent, meaning trucks have to wait for the loader, or truck-dependent, meaning that loaders have to wait for the trucks. Since loaders are a more costly resource, the goal should be loader-dependent, not truck-dependent. Prioritizing the most expensive resources will minimize losses through waiting time.

Tip #3: Make sure your KPIs are aligned.

When it comes to performance management, KPIs are an essential tool. However, when they are not designed with the big picture in mind, they can lead to costly decisions for the company. A classic case is that maintenance and operations departments often have conflicting KPIs.

Operations teams may have KPIs that pressure them to keep equipment running continuously, while maintenance teams focus on maximizing uptime. This creates a situation where operations don't want to take equipment offline for maintenance, but when equipment fails, the maintenance team is penalized. This can lead to disruptions and additional costs that could be avoided. KPIs, should never be designed as standalone components but as part of a system of metrics that make a mine function as efficiently as possible.

Tip #4: Minimize transported waste.

One of the costliest wastes in mining comes from loading and hauling rock with no ore in it. This not only wastes production time and energy but can also damage the processing plant, which is only designed to handle certain types of rock.

In the past, it was difficult for operators to distinguish between good rock and waste, particularly in mines where there is no clear colour differentiation, such as gold mines. However, today, advanced technologies provide real-time survey information to operators, making it easier to avoid costly trips and wasteful operations.

Tip #5: Follow OEM guidelines to prevent catastrophic failures.

Many catastrophic equipment failures start with minor issues that escalate quickly due to harsh mining conditions. The best insurance against this is adhering to OEM guidelines for servicing major components.

Ignoring OEM requirements and delaying repairs can result in catastrophic failures that are significantly more expensive to repair. For instance, timely changes to components like wheel motors can prevent repair costs from spiralling out of control. OEM specifications are carefully designed to ensure continuous operation under harsh mining conditions, and following them reduces the risk of unexpected breakdowns and downtime.

A smarter approach to cost control

Short-term thinking rarely pays off when it comes to saving costs in mines. Mining equipment is the backbone of production, and the disruption of even a single piece can severely slow or halt operations, leading to significant operational and financial impacts.

As a collaborative growth partner in our customers' long-term success, we don't just sell and service equipment. Our goal is to proactively work with you to ensure the performance of your equipment lives up to expectations throughout its lifecycle, all while maintaining cost efficiency. By focusing on long-term strategies, we help maximize efficiency, reduce downtime, and achieve sustainable cost savings.

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